3/24/2021

speaker
Jenny
Investor Relations

And thank you for joining us today to discuss One Stop Systems financial results for the fourth quarter and full year ended December 31st, 2021. With us today are the company's president and chief executive officer, David Rahn, and chief financial officer, John Morrison, as well as the company's chief sales and marketing officer, Jim Isen. Following the remarks, we will open the call to your questions. Then, before we conclude today's call, I will provide some important cautions regarding the forward-looking statements made by management during the call. I would like to remind everyone that the call will be recorded and made available for replay in the Investors section of the company's website. Now I would like to turn the call over to OSS's President and CEO, David Rahn. Please go ahead, sir.

speaker
David Rahn
President and Chief Executive Officer

Thank you, Jenny, and good afternoon, everyone. In 2021, we successfully set new records on many financial fronts, including nearly 20% growth for the year. Our second and third largest customers in the high margin military space grew over 50% each, while our largest customer in the media and entertainment space more than doubled year over year. Breszner, our European division, contributed annual growth of 29%, bringing our total annual revenues to a record $62 million. In the fourth quarter, our largest customer outperformed by over three times its revenue from a year ago. This elevated our revenue 700K over our guidance to 17.8 million, representing an increase of 11% over the previous quarter and 28% over the same year ago quarter. Among all the annual company records that we set, the fourth quarter revenue is a good news story with a caveat. The higher revenue sources temporarily made us overweight on lower margin product mix than in the previous three quarters, yielding a 28% gross margin for the quarter. Nevertheless, we expect this to return to normal historic margins during the current quarter. Our 2021 top line performance generated net income totaling $2.3 million compared to being about break-even in the previous year. And our adjusted EBITDA increased nearly 300% to $4.9 million, approximately 8% of total revenue. These were all company records. More importantly, in 2022, we have seen an acceleration of AI transportable activity. Before I provide additional information on our exciting progress, and our outlook for the rest of the year. I'd like to turn the call over to John Morrison, who will take you through the financial details for the quarter and the year, followed by Jim Eisen, who will provide insight into some of our major program wins, discuss our edge AI products, and our marketing efforts focused on our AI transportable story.

speaker
Jenny

John?

Disclaimer

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